The volume of Center-South Brazil's sugarcane crush in the second half of October is expected to be 31.45 million mt, down nearly 19% year on year and down 2% from the previous two weeks, an S&P Global Platts survey of analysts showed Friday.

Analysts polled said about 3.3 days of crushing had been lost to rain, while roughly 30 mills are expected to have ceased operations over the period.

If confirmed, there would be 61 mills in the intercrop period as of November 1.

According to industry association UNICA, 273 mills were operational in the 2016-17 season, which started April 1.

UNICA is expected to release the official production figures for the key CS Brazil region on Wednesday.

The 2H October cane crush figure suggested in the survey would take the cumulative cane crush so far this season to 537 million mt, up 4% from the same period last season.

The range of analyst forecasts in the survey was 30 million-32.9 million mt, while the range for total recoverable sugar (ATR) was 134-143.9 kg/mt.

The survey expects ATR to be 8.94 kg/mt lower than the previous fortnight at 139.36 kg, but just 1.13 kg lower than 2H October 2015.

Claudiu Covrig, sugar analyst at Platts agricultural unit Kingsman, expects lower ATR levels as key rains fell at the end of previous fortnight and continued into 2H October, with a considerable amount of water accumulating in the plants.

He expects 4.2 days lost to rain, an ATR at 137.5 kg mt, cane crush at 32.1 million mt and a percentage of cane directed to sugar output at 48%, with the balance for ethanol.

The survey showed the ratio of cane to produce sugar to come in at 48%, up 5.86 percentage points from a year earlier.

Sugar production is expected to have reached nearly 2 million mt, down 8% from a year ago, while ethanol output is expected to have dropped 28% year on year to 1.33 billion liters, the survey showed.

Anhydrous ethanol output is likely to have accounted for 45.5% of total ethanol, or 606 million liters, while hydrous accounted for the balance.

If the expectation for sugar and ethanol output proves correct, the cumulative production over April-October would be 32.02 million of sugar, up 16% year on year, and 22.6 billion liters of ethanol, down 4% on the year.

Ethanol production declined this season amid higher sugar prices, which led producers to direct more cane to sugar output rather than to ethanol.

In Parana state, one of the sugarcane producers in CS Brazil, total cane crushed in 2H October was 2.33 million mt, down 19% on the year, but up 6% from 1H October, data from Bioenergy Producers Associations of Parana showed.

The association said that until November 1 all 25 mills operating this season were still operational.

Total ethanol sales (anhydrous and hydrous) in 2H October to the domestic market are expected to have reached roughly 1.05 billion liters, with anhydrous accounting for 40%, analysts at Kingsman forecast.

Hydrous ethanol is used in flex-fuel vehicles and anhydrous is blended with gasoline at a ratio of 27%, according to the country's mandate.

Contact Platts Communications to arrange interviews with Platts Kingsman sugar and ethanol analysts: Claudiu Covrig, Maria Nunez, and Alessandra Rosete; and Platts sugar price assessments specialists: David Elward, Nicolle Monteiro de Castro and Darren Stetzel. If you would like to receive this on a regular basis, please select Agriculture at this alerts sign-up link.

Editor's Note: In its bi-monthly cane harvest update, UNICA publishes a range of sugarcane harvest production metrics for Brazil's Center-South region, also broken down into São Paulo and other states.

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